President Trump to Dave Portnoy: The 401(k) investors who followed my advice are ‘doing phenomenally’


After President Donald Trump took some serious lumps in his contentious interview with Fox News host Chris Wallace earlier this month, it was probably time for a friendlier chat.

Enter David Portnoy, the outspoken founder of Barstool Sports, who came to the White House on Friday armed with the kind of softballs that had the president saying “I like this interview” within about a minute of sitting down. Yes, it didn’t take long for the two to become quite chummy.

Eventually the wide-ranging conversation turned away from Dr. Anthony Fauci and nationwide protests to the stock market. When Portnoy, who made a social-media spectacle of his trading game in the absence of live sports, broached the subject, here’s what Trump had to say:


“You got in at the right time. A lot of people with the 401(k)s are doing phenomenally, but a lot of people sold stock and now they’re saying, ‘I missed it,’ and I said to people, ‘Don’t sell because the foundation is so strong’… But the people that really lost in terms of economic are the people that got out. The people that stayed in… they stayed with me. They’re doing great.”

It’s true that those investors who dumped the tech-heavy Nasdaq Composite
COMP,
-0.93%

at the lows back in March have missed out on a the market’s resilient 51% rebound. The S&P 500
SPX,
-0.61%

and Dow Jones Industrial Average
DJIA,
-0.68%

have moved similarly higher since the coronavirus sent investors fleeing the market in a hurry.

As for Fauci, Trump’s sidelined task force member, Portnoy said that he’s not a fan because his “stocks tank” whenever the idea of more lockdowns is suggested.

Trump offered praise for Fauci, but also some hesitation. “He’d like it to see it closed up for a couple of years, but that’s OK because I’m president, I appreciate your opinion, now give me another opinion, someone please,” Trump said. “We’re open and we’re doing well. And I just had a press conference about opening the schools. You’ve got to open the schools.”

We’ll get a gauge of just how much economic damage the pandemic has caused later this week, when the Commerce Department on Thursday releases the second-quarter GDP report.

How ugly will it be? “We’re looking for the worst postwar economic contraction in 62 years,” said Sal Guatieri, senior economist at BMO Capital Markets.

Here’s the full interview (the stock market stuff starts at around the 18:45 mark):

Meanwhile, Portnoy continues to attract attention with his trading antics. Last month, he grabbed plenty of clicks when he ripped Berkshire Hathaway’s
BRK.B,
+0.65%

Warren Buffett for unloading airline stocks as the coronavirus epidemic took its initial toll.

“I’m just printing money,” Portnoy said. “Why take profits when every airline goes up 20% every day? Losers take profits. Winners push the chips to the middle. … I should be up a billion dollars.”



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5 things to know about health care in retirement


Waiting for Medicare to cover your retirement health-insurance expenses? Look again. Figuring out Medicare is a minefield. 

This is not like your employer’s two or three insurance options. There are many more components and Medicare planning comes together more like a puzzle. Compounding the issue, health care is so personal that there are no cookie-cutter answers; each individual’s needs are unique.

This is what’s essential to know now — whether retirement is a few years off or early retirement options may be on the table today.

Medicare is not free

Most people receive Medicare Part A (inpatient hospital coverage) for free if they have accumulated the qualified 30 quarters of work. Yet that is only one piece of health insurance. Each piece of Medicare coverage has its own deductible as well as coverage. They all have different fees as well

For example, what you are charged for Part B is based on income. The average monthly premium for 2020 is $144.60. There is not a family or couple discount. And starting at age 65 you must pay for it — even if you are not collecting Social Security yet.  

Plan for it. Be ready. 

Here are the Medicare basics:

Part A is hospital insurance for inpatients and is free in most cases.

Part B is Medical for doctors’ services whether on an inpatient or outpatient basis. Cost varies by income.

Part C is premium-paid coverage through private plan. Cost varies by plan and coverage.

Part D is prescription coverage through Medicare and a private insurance company. Co-pays and coverage varies by plan. Understand your prescription needs.

Additional costs come beyond Medicare coverage. They include dental care, eye care, along with deductibles and co-pays. Many people assume long-term care costs of assisted living or home care are covered by Medicare, but this is not true.

Medicare coverage is not automatic

Signing up is easy. You can do it online

However, if you don’t sign up during a window around your 65th birthday, you will be charged a penalty when you finally do. If you miss this deadline, your monthly premium will increase as much as 10% for the rest of your life.  

Even if you have been collecting Social Security since age 62, you must sign up for Medicare separately. If you will be waiting to collect Social Security until age 67 or even 70, you still must sign up at age 65.

 You still have to decide among health-insurance policies

To pick a plan, you must know what you need for additional medical coverage. Then, you can look at what your options are. Do you qualify for Medicaid because you have limited income and resources? Or do you have an employer insurance plan or veterans benefits? You may not need additional coverage, but everyone needs to understand some details.

Medigap, which is also called Medicare supplement insurance, is a private insurance policy that helps fill in the “gaps” of coverage for costs like deductibles and co-pays. Medicare Advantage is a health plan by a private company that contracts with Medicare to provide all your Part A and Part B benefits. Some Medicare Advantage plans cover prescriptions.  

You can get a Medigap policy, a Medicare Advantage plan or none at all if you are covered elsewhere, like through an employer or spouse’s plan.

To distinguish among these options, do your homework before you sign up for Medicare.

You can learn more in several ways:

  • Do your research on the Medicare website, which has lots of information, including what’s offered in each state.
  • Reach out to your State Health Insurance Assistance Program (SHIP) that helps sort through different health insurance options.
  • Get objective advice. Contact your local senior center and area nonprofit organizations. Many have workshops to get you started on your educational journey to become comfortable with Medicare and all it entails. Or hire a financial planner or Medicare insurance consultant.

However you learn, get educated first and then explore the insurance plans that are offered by different insurance companies in your state. The names and options can be confusing. Only three states have standardized the plans. Massachusetts, Minnesota, and Wisconsin.

Only contact a salesperson for an insurance company after you have narrowed down your options and are ready to learn more about their plan. 

Reading the sales brochure and talking to an agent first may result in you buying more coverage than you need, which means paying more than necessary.  

For example, Medigap policies have higher monthly premiums because they cover more. You may pay end up paying more with a Medicare Advantage plan in the long run because of copays and deductibles. Or you may choose a plan which does not include your doctor. This will leave you with a personal medical decision that may be heart-wrenching and affect your care.  

The good news is your choice is not permanent. You can change your Medicare plan every year during open enrollment (Oct. 15-Dec. 7). If your health situation changes or you make a poor choice, you can start the following year with a new plan.

Read: What to know before switching to Medicare Advantage

You may need a new policy if you move to a new state

Planning a move out of state in retirement? Medicare is a federal program, which means it does apply nationwide, so the basic portion is the same wherever you live. But getting informed on the Medigap and Medicare Advantage plans starts all over again.

Be sure to review plans and get a Medigap plan for the state you live in (if you decide to go that route), as each state licenses different insurance companies and policies.

For example, Vermont, where I live, has a handful of types of supplemental insurance. Massachusetts has many more. If you change your state of residency, you must sign up for coverage in the state you reside in. Luckily, each state also has a SHIP.

Medicare won’t always cover you when traveling abroad

You finally have the time to travel. However, your health insurance may not cover you when you are traveling out of the country. Before you take any sojourn out of the U.S., be sure to understand what is covered and what is not. Most medical expenses won’t be covered by Medicare or Medicare Advantage programs if you are outside the U.S. or its territories. One exception is that Part A will cover a hospital stay to certain limits. Some Medigap plans do cover you for a short time overseas.

Consider paying extra for the medical travel insurance, which is different from travel interruption service as it will cover expenses if you should experience a health crisis overseas. Your travel professional can help find a plan that works for you. The last thing you want after a trip you saved, planned for, and enjoyed is a surprise medical bill.

CD Moriarty, CFP is a Vermont-based financial speaker, writer and coach who wants to create financial peace of mind for others. She can be reached through her website.

Now read: There is more to picking a place to retire than low taxes — avoid these 5 expensive mistakes



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The share of Americans skipping their mortgage payments falls to lowest level in two months and a $5 billion ‘shadow debt’ market is helping keep for-profit colleges afloat


Stay safe, MarketWatchers, and don’t miss these top stories:

Personal Finance
The share of Americans skipping their mortgage payments falls to lowest level in two months

Fewer homeowners are in forbearance on their mortgages, despite the continued rise in coronavirus cases across the country.

A $5 billion ‘shadow debt’ market is helping keep for-profit colleges afloat, new report charges

These risky loan products can have interest rates as high as 35%, according to a report by the Student Borrower Protection Center.

Despite surge in COVID-19, Trump says: ‘I’ll be right eventually — it’s going to disappear’

‘Many of those people are young people that would heal in a day. They have the sniffles,’ President Trump told Chris Wallace during a one-on-one interview on Fox News.

When will I get my tax refund? ‘We’re focused on the paper returns,’ the IRS says as it reopens offices

Processing refunds and customer service are two priorities, the IRS Commissioner says.

California, New Jersey and New York City pause indoor dining — why is it dangerous?

‘We’re moving back into a modification mode of our original stay-at-home order,” Gov. Gavin Newsom, a Democrat, said. ‘This continues to be a deadly disease.’

Fauci takes aim at Trump administration, lawmakers and young Americans: ‘You’re propagating the pandemic’

Anthony Fauci made his case to Facebook CEO Mark Zuckerberg as to why it’s time to change the approach to the coronavirus.

Trump vs. Fauci: The president says, ‘He was wrong’; the doctor responds, ‘Everybody thinks I’m doing more than an outstanding job’

‘Well, I don’t know that he’s a leaker. He’s a little bit of an alarmist,’ President Trump said of Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases.

This 59-year-old bartender’s house and health insurance are at stake if the extra $600 in unemployment benefits expires

‘I want to go back to work because there’s always a chance of making more money than what I used to make — there’s good weeks and bad weeks. But now there are just bad weeks.’

Elsewhere on MarketWatch
‘Don’t be stupid’ — New York governor warns bars and restaurants can be closed again if street partying continues

Gov. Andrew Cuomo demanded local governments, law enforcement agencies to enforce social distancing mandates

Why pooled testing could be a breakthrough in the fight against COVID-19

What is pooled testing for COVID-19, and why does the U.S. need it?

Here’s how a Biden presidency could hurt financial stocks

As Joe Biden leads President Donald Trump by double digits in national polls, analysts are assessing how financial stocks could be affected by having the veteran Democratic politician in the Oval Office.

Republicans will start work in Senate on $1 trillion coronavirus relief package, Mnuchin says

Lawmakers returned to Washington Monday intent on finishing another coronavirus relief measure over the next three weeks.



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We want a diverse area with moderate population, warm, beach and culture — so where should we retire?


We are African-Americans and want to retire to a diverse area with moderate population, warm, beach, culture. We can afford a better-than-average lifestyle and want to feel accepted in our new community — hopefully somewhere with high walkability and homes with character. And maybe near a major airport…. for lots of traveling.

Let me know what you come up with. Thanks.

Jennifer

Dear Jennifer,

We all know there are plenty of beach towns in the U.S., but finding one with personality is a bigger challenge.

I’m going to leave out some obvious places, like Miami Beach and, though less diverse, Hilton Head. On the West Coast, no Southern California. Too obvious. Plus, while you can afford a better-than average lifestyle, home prices there are so high that they could hamper your travel budget. The same goes for Sag Harbor and the Hamptons more broadly (plus you’d still have winter on Long Island).

Instead, I’ll look for some off-the-beaten path possibilities. I’m sure readers will have their own suggestions.

As always, explore the area in all seasons, and be realistic about the retirement budget. When you find your dream place, ask which areas are susceptible to flooding during hurricanes and other storms.

Read:There is more to picking a place to retire than low taxes — avoid these 5 expensive mistakes

The Atlantic: Wilmington, North Carolina

Check out the Cape Fear region, which includes Wilmington as well as beach towns like Carolina Beach and the more upscale Wrightsville Beach.

Wilmington is growing quickly and at 123,000 people has more than half of New Hanover County’s population. The share of those 65 and older are roughly in line with the U.S. average. Look for a place where you’ll catch a breeze off the Intracoastal Waterway or the ocean to counter the summer humidity — so not too far inland.

You’ll have no shortage of cultural offerings, starting with Thalian Hall, the Cameron Art Museum and the Wilson Center. The University of North Carolina Wilmington, which has 17,000 students, lets those 65 and older audit classes for free, while its Osher Lifelong Learning Institute offers shorter courses to those 50 and older.

Be sure to explore the Gullah Geechee Cultural Heritage Corridor, which stretches from Wilmington to Jacksonville, Fla., and is home to cultural groups descended from enslaved peoples from West and Central Africa. Poplar Grove Plantation is one local site.

Winter days get into the 50s, with average lows in the 40s. Average highs in July are in the 80s.

Here’s what’s on the housing market now in Wilmington and in New Hanover County using Realtor.com (which, like MarketWatch, is owned by News Corp.).

As for travel, while Wilmington has an airport, you’ll have more choices flying from Raleigh two hours away.

The Gulf of Mexico: Gulfport, Florida

Florida’s popularity with retirees is no secret, in part because it’s affordable and has no state income tax. But all too often, home means living in a high rise or a gated community.

Gulfport, though, is described as how Key West was before it became overrun with tourists.

This town of 12,000, just west of St. Petersburg, is your artsy, funky, walkable spot in the middle of the Tampa Bay metro area and its 3 million people. You’ll also find plenty of retirees; 30% of Gulfport’s residents are 65 or older.

Gulfport comes with sunset views from its own (man-made) strip of sand over Boca Ciega Bay so, yes, it’s on the Gulf side of Florida but technically not on the Gulf of Mexico. But opposite the bay is St. Pete Beach, which gets raves from TripAdvisor (a local says head to the Pass-A-Grille section at the southern tip). When you tire of that, there are more white-sand beaches to sink your toes in, including Siesta Beach in Sarasota an hour south (and Dr. Beach’s pick in 2017 for best beach in the U.S.) as well as Caladesi Island State Park (No. 6 on Dr. Beach’s list this year) an hour north.

And if you just want to walk, don’t overlook the 45-mile Pinellas Trail that stretches from St. Petersburg to Tarpon Springs and goes through the northern edge of Gulfport.

For bigger getaways, there’s Tampa International Airport.

To get a sense of the local housing market, here’s what’s for sale now, again using Realtor.com.

As you explore the Tampa area, also check out Safety Harbor, a town of 18,000 on the western side of Tampa Bay with its own walkable downtown, and Dunedin (pronounced Duh-nee-din) north of Clearwater that’s also popular with retirees. You know there’s plenty of cultural offerings in a metro this size. One that might be easy to overlook: the Dr. Carter G. Woodson African-American Museum in St. Petersburg.

The Pacific: Oahu, Hawaii

If year-round pleasant weather is the priority, Hawaii can’t be beat. Average highs are in the 80s year-round, and average lows bottom out in the mid-60s. Of course there’s no shortage of beautiful beaches.

When you tire of water, take advantage of wonderful hiking opportunities. And while the focus of your international travels might shift toward Asia, you may want to spend more time just staying, discovering Hawaiian culture and exploring some of the national parks.

You admittedly won’t find a big population of African-Americans here, but Hawaiians have a much more open and fluid view of race and diversity than many of us on the mainland.

Start your search for your retirement life on Oahu Island. About a third of the island’s million residents live in Honolulu itself, one of the country’s most diverse and affluent cities and the birthplace of President Barack Obama. Curious about sites associated with him in some way? Here are even more.

You’ll find plenty of cultural offerings in Honolulu (including some of Hawaii’s best festivals, as voted by readers of Hawai’i Magazine), plus the state university (those 60 and older can audit classes for free).

There’s even Costco, if that’s your thing. Oh, and that Elvis statue

Yes, there’s the cost of getting everything to Hawaii — some things will be even more expensive than parts of California. Here’s what the local housing market looks like.

If Honolulu is too pricey, consider some of the smaller towns on the island. Or check out the less-populated (and cheaper) Big Island, also known as Hawaii Island. Start with the Kalaoa area.

Readers, where should Jennifer retire?



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Seniors who rely on dividend income may be in for some lean times


Back in January 2020 B.C. (Before Coronavirus), it looked like it would be a banner year for dividend investors. Payments to shareholders were expected, for the first time, to top $500 billion.

“It would take a major event to stop a record for this year,” Howard Silverblatt, senior index analyst at S&P Dow Jones Indices, told The Wall Street Journal as the year began.

Oops.

Now, thanks to the pandemic and resulting economic collapse — U.S. GDP fell at a 5.0% rate in the second quarter and could plunge at a mind-blowing 39.5% pace according to the Atlanta Federal Reserve — companies have been chopping dividends left and right.

In the first quarter of the year, S&P said that companies in its benchmark index cut dividends by $5.5 billion. But payouts really fell off the cliff in the second quarter, plunging a whopping $42.5 billion from a year earlier.

It was the biggest decline since the first quarter of 2009 during the so-called Great Recession, according to S&P 500 Dow Jones Indices.

Read: More Americans are worried about retirement now — and have changed their plans

Depending on the length of the pandemic and its effect on the economy, this may prove to be a short-term problem for younger investors. But for seniors who count on dividends to make ends meet, it’s a far greater problem for two reasons.

First, many companies have slashed dividends to preserve cash. One of dozens of examples: In May, oil services provider Halliburton
HAL,
-0.07%

cut its quarterly payout 75% to 18 cents per share. Seniors counting on that income will have to make do with a lot less.

But for seniors who absolutely need money now, the second problem comes into play: They could always raise cash by selling shares, but the problem here is that prices have plunged: Halliburton, which began the year trading near $24 a share, currently fetches about $12. On top of that, selling stock obviously eliminates any future dividends, which could be restored during a potential market recovery.

Then there are companies that have eliminated dividends entirely. Auto maker General Motors
GM,
-1.49%

used to pay shareholders 38 cents a share each quarter. In April, that was suspended. Shares have fallen about a third this year.

Read: What to do if you inherit your parents’ stuff — and don’t want it

“Selling stocks at an inconvenient time is adding insult to injury,” says Marguerita Cheng, CEO and co-founder of Blue Ocean Global Wealth, a Maryland investment advisory firm. “There are other ways to improve cash flow that should be considered.”

She says if you own a home, consider refinancing your mortgage, if you still have one, to lock in a lower rate. “Take advantage of this low-interest-rate environment. You could, depending on your circumstances, free up hundreds of dollars per month.”

Cheng says a reverse mortgage could also make sense, but emphasizes that like a possible refinancing, you should discuss such major moves with a trusted financial adviser.

If you don’t own a home, your options are more limited. While Cheng’s overall advice is to always take Social Security as late as you can, if you are truly stretched for cash and are eligible for benefits, then go ahead and take it now. “If you’re a couple, one of you could begin receiving benefits now, while your partner delays doing so.”

Cheng also says take a look at nonmortgage debt: auto loans, credit cards, school loans — yes, many seniors still have student debt.

Read: Do these simple things to turn your retirement savings into big money

“You may find that lenders are willing to extend better rates,” she says, and as always, focus on paying off debt with the highest rate first — while making minimum monthly payments elsewhere.

The pandemic may also mean that, like millions of Americans, you’re driving less. “You might be able to negotiate a lower rate for your auto insurance,” she points out.

The bottom line here: Try to increase what’s coming in while reducing what’s going out. A little bit here and a little bit there could give you the breathing room you need in a very difficult time.

Now my question of the month: If you are age 55 and up, what are YOU doing to free up cash? What moves have you made, and what advice do you have for others? Write to me at RetireBetterMarketWatch@gmail.com and I may use your advice in a future column.



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